Consumers’ credit card balances have risen 15% over the last year as of September—the biggest annual spike since 2001, the Federal Reserve Bank of New York said Tuesday. Total credit card debt stood at $930 billion at the end of the third quarter, up from $890 billion at the end of the second quarter and tying the record set in the fourth quarter of 2019 just before the pandemic struck. The report is based on a sample of financial data gathered from credit reporting agency Equifax. Credit card debt has likely increased over the last year for the simple reason that we’ve been spending more—hardly a surprise since inflation is running near a 40-year high, economists at the Fed said in a blog post assessing the data. That’s the exact opposite of what happened during the earlier days of the pandemic, when consumers cut back spending and paid down their debts at a furious pace. But this year, people had slightly more trouble paying down the extra debt. The number of accounts with payments more than a month overdue rose for the third quarter in a row, climbing to 5.24% from 4.76% in the second quarter. While that’s still below the pre-pandemic rate of 6.95%, Fed economists said the uptick is worth monitoring in case it’s a sign of future economic trouble. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
